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25 JULY 2014

SOCIAL HOUSING WORKSHOP:

THE ROLE OF THE PROVINCIAL

GOVERNMENT IN SOCIAL HOUSING

Contents

1. Background

2. Challenges/Interventions Underway

3. Purpose

4. Policy and Legislation

4. Role of the Provincial Government

5. Nature of the Institutional Subsidy

6. How to Apply for the Institutional Subsidy

7. Discussions

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1. Background

• The Department of Human Settlements both nationally and provincially have

a mandate to deliver adequate housing. In terms of section 26 of the

Constitution of the Republic of South Africa of 1996, everyone has a right of

access to adequate housing. Furthermore, in terms of section 26(2), the state

must take reasonable legislative and other measures within its available

resources to realize this progressive right.

• As part of this mandate, the Department also provides housing opportunities

through the provision of affordable rental housing to the low income market

through the Social Housing and Institutional Subsidy programmes. In rolling

out some of these programmes, the department has encountered challenges

due to various factors (including the lack of capacity in the industry) which

has resulted in slow delivery on rental housing as follows:

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Programme

Audited/ Actual

PerformanceTargets

Medium Term

Targets

2011/12 2012 /13 2013/14 2014/15 2015/16 2016/17

Institutional

Subsidy (Number

of subsidies

approved)

0 104 47 0 510 480

Social Housing

Programme

(Number of units

completed)

0 1,604 437 260 500 500

Background cont’d

• The main objectives of the social housing programme are:

a. to contribute to the national priority of restructuring South African

society in order to address structural, economic, social and spatial

dysfunctionalities thereby contributing to gvt’s vision of an economically

empowered, non-racial and integrated society living in sustainable

human settlements.

b. Secondly, it is to improve and contribute to the overall functioning of

the housing sector and in particular the rental sub-component thereof,

especially insofar as social housing is able to contribute to widening

the range of housing options available to the poor.

• The social housing programme is key to the achievement of urban

restructuring (hence restructuring zones)

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• The Minister of Human Settlements (Hon Lindiwe Sisulu)

in her budget speech announced that 1,5mil housing

opportunities will be delivered within the next 5 years.

• Furthermore, within the next 12 months, each province

will launch an integrated human settlement Ministerial

project that will deliver a minimum of 10 000 houses and

5 000 service stands over five years. This will include

20% rental units (2 000), 20% gap housing (2 000), 30%

BNG houses (3 000), 10% social housing (1 000) and

20% (2 000) serviced sites for employer assisted

housing.

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Background Cont’d

2. Challenges and Interventions Underway

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Challenges Interventions Underway

1. Lack of a pipeline of

projects that are ‘ready’ for

implementation in Social

Housing and CRU

• KZN Rental Housing Strategic Plan launched in May

2013 which seeks to guide the province and has

identified a list of 47 projects consisting of 25 406 (15

769 CRU and 9 637 Social Housing) Units over the

next 5 years

• Pipelines being refined for readiness through the

appointment of service providers to undertake

studies that would qualify projects as ‘feasible’ and

make them ready for implementation (shorten

timeframes for pre-implementation studies)

2. Lack of adequate suitable

delivery agents for social

housing and lack of funding

from financial institutions

(Social Housing +

Institutional Subsidy)

• Partnering with private agents that have the financial

capacity to deliver on social housing

• Engagements being set up with financial institutions

to come on board with funding for institutions

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Challenges Interventions Underway

3. The slow process in the declaration of

Provincial Restructuring Zones for social

housing development

• Engagements with the national dept

on an ongoing basis

• High-level intervention is being

sought

2. Challenges and Interventions Underway

3. Purpose

The purpose of this presentation is to highlight the

role of the Provincial Dept of Human Settlements in

the delivery of social housing.

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4. Policy and Legislation

We are governed by 3 policy documents namely:

1. The Social housing Act

2. The Social Housing Policy

3. The National Housing Code

Obtainable : www.kzndhs.gov.za/www.shra.org.za

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5. The Role of the Provincial Gtv

The provincial government provides a provincial regulatory and

legislative framework in which provincial housing priorities may be

addressed and in which SHIs and municipalities have to operate. This

provincial framework is aligned to the national framework. The province

is responsible for approving, allocating and administrating all rental

housing subsidies, including the institutional subsidy. The province

works closely with municipalities in identifying the development of new

rental housing projects (identification of projects, making resources

available to make projects possible, etc). The province then allocates

the subsidy, while the municipality has to provide services like water

and electricity. Furthermore, in case of a conflict between SHIs or other

delivery agents and a municipality, the province has a mediating role.

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The Role of the Provincial Gtv cont’d

(Social Housing Act)

• Every provincial government, through its MEC, must—

a. ensure fairness, equity and compliance with national and provincial

social housing norms and standards;

b. ensure the protection of consumers by creating awareness of

consumers‘ rights and obligations;

c. facilitate sustainability and growth in the social housing sector;

d. mediate in cases of conflict between a social housing institution or other

delivery agent and a municipality, if required;

e. submit proposed restructuring zones to the Minister;

f. monitor social housing projects to ascertain that relevant prescripts,

norms and standards are being complied with;

g. approve, allocate and administer capital grants, in the manner

contemplated in the social housing investment plan, in approved

projects;

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The Role of the Provincial Gtvcont’d (Social Housing Act)

h. ensure that the grant approval process is

conducted efficiently;

i. administer the social housing programme

j. develop the capacity of municipalities to

fulfill the roles and responsibilities.

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The Role of the Provincial Gtvcont’d (Social Housing Policy)

• Receive project applications from delivery agents and decide on

extent of top-ups

• Ensure compliance with national and provincial social housing norms

and standards.

• On an annual basis develop a social housing programme and

associated business plan and submit to National government for

approval and funding

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• It provides a fixed amount of subsidy in respect of all

households complying with the provisions of the Programme

funding schedule as annually approved by the Director

General;

• Pays the subsidy out in the name of the institution and not in

the name of the beneficiary; and

• Does not necessarily provide the beneficiary with the

individual ownership or immediate ownership.

6. The Nature of the Institutional Subsidy

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Prior to applying for an institutional subsidy, delivery agents (as

per SHRA) must check that their institution qualifies for the

subsidy. This is determined by the legal status of the institution

and its main aim, how it relates to the residents, the tenure

arrangements permitted and so on. When applying for the

subsidy per project, the following steps must be followed:

7. How to Apply for the Institutional Subsidy

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How to Apply for the Institutional Subsidy cont’d

• Prepare a project application;

• Submit the project application to the provincial Department

of Human Settlements; and

• Submit the standard required agreements.

• When the application has been approved, an agreement is

entered into outlining how the subsidy will be paid and

what will happen once an installment sale, share block or

lease agreement has been concluded

DISCUSSIONS

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THANK YOU

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